**Exhibit99(a)**

 

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**INNOVATION********IN********PHOTODYNAMIC********THERAPY**

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**DUSA Pharmaceuticals, Inc.**®

**For Release at 8:00 a.m.**

 

**DUSA PHARMACEUTICALS REPORTS THIRD QUARTERCORPORATE HIGHLIGHTS AND FINANCIAL RESULTS**

 

**Wilmington, MA. November 11th, 2004**- DUSA Pharmaceuticals, Inc. (NASDAQ NMS: DUSA) reported today its corporatehighlights and financial results for the third quarter ended September 30th,2004.

 

**Corporate Highlights**

 

As reported earlier, Q3 2004 end-user Levulan®Kerastick® net sales to physicians totaled 20,196, including 1,326sold by Coherent-AMT, our Canadian marketing and distribution partner. DuringQ3 2003, only 1,938 Kerastick units were sold, all in the U.S.  Quarter over quarter, U.S. Kerastick salesgrew 18% to 18,870, versus 16,002 during Q2 2004.

 

The net number of BLU-U® units placed indoctors’ offices during the quarter was 95, consisting of 70 in the U.S. and 25in Canada, versus 37 units placed during Q3 2003.  At the end of Q3 2004, there were 870 unitsin doctor’s offices, consisting of 784 in the U.S. and 86 in Canada, versus 360at the end of Q3 2003.

 

Thispast quarter, DUSA continued with Part A of its Phase II clinical trial onLevulanPDT in the treatment of photodamaged skin. In October,following FDA review, we also announced the initiation of a Phase II study onLevulan PDT for the treatment of acne vulgaris.

 

There were a number ofpeer-reviewed scientific articles related to the use of Levulan published inthe dermatology literature during the quarter, as well as numerous lectures andpresentations at scientific meetings and CME events. One important studycombined Levulan with intense pulsed light (IPL) versus IPL alone for thetreatment of photodamaged skin. The study, led by Dr. Jeffrey Dover of SkinCarePhysicians of Chestnut Hill, MA, showed that Levulan combined with IPL resultedin statistically significant improvement (vs. IPL alone) in global photoaging,mottled pigmentation, and fine lines. DUSA provided Levulan and financialsupport to the investigator group

 

Late in the quarter, wealso announced the signing of a clinical trial agreement with the NationalCancer Institute (NCI) Division of Cancer Prevention (DCP), for the clinicaldevelopment of Levulan photodynamic therapy (PDT) for the treatment ofhigh-grade dysplasia (HGD) within Barrett’s Esophagus (BE).  The NCI DCP will pay for the clinical trialcosts, while DUSA will provide Levulan, device(s) and the necessary trainingfor the investigators involved in the studies. Subject to successful Phase II and III clinical trial results, DUSAintends to seek FDA approval in due course. During the quarter, we alsocontinued with our Phase II pilot study using Levulan PDT for the treatment ofHGD within BE. The data from this pilot trial will contribute to the design ofthe NCI study, which is not expected to commence for a number of months.

 

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Other developments during the quarter included anannouncement of a mediation agreement with Photocure and Galderma related toour potential U.S. and other patent disputes; our inclusion in the 2004 UBSGlobal Life Sciences Conference in New York; and the announcement that our CFOwould be leaving the Company after the end of the year for personal reasons (asearch for a replacement is underway).

 

Dr. Geoffrey Shulman, DUSA’s President and CEO, stated“We are very pleased with our Q3 performance. U.S. Kerastick sales continued toincrease despite seasonal factors, our net loss decreased versus the priorquarter, our therapy continued to get increasing recognition amongdermatologists, our clinical trials continued to progress, and we announced animportant agreement with the NCI. We believe that we are now well positioned tobecome a significant competitor in the field of dermatology and beyond.”

 

**Financial Highlights:**

For the three months ended September 30, 2004, DUSA’snet loss was ($2,975,000), or ($0.18) per common share, compared to a net lossof ($3,680,000), or ($0.26) per common share in 2003. This lower net loss wasprimarily due to higher net Kerastick and BLU-U product sales, and lower legalcosts, offset, in part, by an increase in marketing & sales expenses.

 

Revenues for the three months ended September 30, 2004were $2,011,000, compared to $163,000 in 2003. During the current quarter,Kerastick and BLU-U sales to physicians were $1,499,000 and $512,000respectively, including sales in Canada by Coherent-AMT, versus 2003 revenuesof $163,000 that were totally comprised of U.S. Kerastick sales. Thissignificant increase in revenues compared to the prior year was directlyrelated to the efforts of our sales force since its launch in October2003.  In addition, the increase in BLU-Usales was caused, in part, by our ability to sell the BLU-U to physicians as astand alone device for the treatment of moderate inflammatory acne vulgaris.  Although the level of Kerastick sales toend-users for 2004 is much higher than for 2003, Kerastick sales must continueto increase significantly in order for DUSA to become a profitable operatingcompany.

 

Total operating costs for the three months endedSeptember 30, 2004 were $5,336,000, compared to $4,252,000 in 2003.  This increase was primarily due to a higherlevel of research and development costs in support of our various researchprojects discussed above, and increased marketing and sales costs related toour expanding sales force and related marketing and sales activities.  These increases were partly offset by a lowerlevel of general and administrative expenses attributable to the absence ofpatent litigation costs in Australia, as the final hearing in the PhotoCurelitigation was held during April 2004.

 

Total cash, cash equivalents, and United Statesgovernment securities, including investments classified as long-term, as ofSeptember 30, 2004 were $52,545,000, compared to $37,969,000 at the end of2003. This increase is primarily due to $28,463,000 of gross proceeds raisedfrom the private placement in March and April 2004, net of operating cashexpended during 2004.

 

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**DUSA PHARMACEUTICALS, INC.**

**CONDENSED CONSOLIDATED BALANCESHEETS**

 
| ** **                                          | ** ** | **September 30,  2004** | ** ** | **December 31,  2003** | ** ** |
|-----------------------------------------------------|------------|-------------------------|------------|------------------------|------------|
| ** **                                          | ** ** | **(Unaudited)**         | ** ** | ** **             | ** ** |
| **ASSETS**                                          | ** ** | ** **              | ** ** | ** **             | ** ** |
| **Current Assets**                                  |       |                    |       |                   |       |
| Cash, and cash equivalents                          |       | $                       | 10,493,350 |                   | $          | 4,294,482 |   |
| Marketable securities available for sale            |       | 41,912,004              |       | 30,284,841             |       |
| Accounts receivable                                 |       | 391,733                 |       | 229,483                |       |
| Inventory                                           |       | 1,381,444               |       | 712,831                |       |
| Other current assets                                |       | 2,187,381               |       | 1,534,209              |       |
| **Total current assets**                            |       | 56,365,912              |       | 37,055,846             |       |
| Restricted cash                                     |       | 140,221                 |       | 139,213                |       |
| United States government securities                 |       | —                  |       | 3,250,940              |       |
| Property and equipment, net                         |       | 3,568,262               |       | 4,251,489              |       |
| ** **                                          |       |                    |       |                   |       |
| **TOTAL ASSETS**                                    |       | $                       | 60,074,395 |                   | $          | 44,697,488 |   |
|                                                |       |                    |       |                   |       |
| **LIABILITIES AND SHAREHOLDERS’ EQUITY**       |       |                    |       |                   |       |
|                                                |       |                    |       |                   |       |
| **Current Liabilities**                             |       |                    |       |                   |       |
| Accounts payable and accrued expenses               |       | $                       | 2,745,498  |                   | $          | 2,818,039 |   |
| Current maturities of long-term debt                |       | —                  |       | 270,000                |       |
| Deferred revenue                                    |       | 294,432                 |       | 129,900                |       |
| **Total current liabilities**                       |       | 3,039,930               |       | 3,217,939              |       |
| Long-term debt, net of current maturities           |       | —                  |       | 1,247,500              |       |
| **TOTAL LIABILITIES**                               |       | 3,039,930               |       | 4,465,439              |       |
| **TOTAL SHAREHOLDERS’ EQUITY**                 |       | 57,034,465              |       | 40,232,049             |       |
| ** **                                          |       |                    |       |                   |       |
| **TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY** |       | $                       | 60,074,395 |                   | $          | 44,697,488 |   |

 

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**DUSA PHARMACEUTICALS, INC.**

**CONDENSED CONSOLIDATED STATEMENTSOF OPERATIONS**

**(Amounts are in US Dollars)**

 
| ** **                                                | ** ** | **Three Months Ended  September 30** | ** ** | **Nine Months Ended  September 30** | ** ** |
|-----------------------------------------------------------|------------|--------------------------------------|------------|-------------------------------------|------------|
| ** **                                                | ** ** | **2004**                             | ** ** | **2003**                            | ** ** | **2004** | ** ** | **2003** | ** ** |
| ** **                                                |       | **(Unaudited)**                      |       | **(Unaudited)**                     |       |
| **REVENUES**                                              |       |                                 |       |                                |       |   |   |   |   |
| Product sales                                             |       | $                                    | 2,010,619  |                                | $          | 163,155 |   | $ | 5,442,332 |   | $ | 453,800 |   |
|                                                      |       |                                 |       |                                |       |   |   |   |   |
| **OPERATING COSTS**                                       |       |                                 |       |                                |       |   |   |   |   |
| Cost of product sales and royalties                       |       | 718,168                              |       | 887,336                             |       | 2,612,884 |   | 2,464,667 |   |
| Research and development                                  |       | 1,585,099                            |       | 1,202,130                           |       | 4,850,159 |   | 4,167,121 |   |
| Marketing and sales                                       |       | 1,835,210                            |       | 535,114                             |       | 4,901,813 |   | 1,598,604 |   |
| General and administrative                                |       | 1,197,707                            |       | 1,627,364                           |       | 5,775,500 |   | 4,782,385 |   |
| **TOTAL OPERATING COSTS**                                 |       | 5,336,184                            |       | 4,251,944                           |       | 18,140,356 |   | 13,012,777 |   |
| **LOSS FROM OPERATIONS**                                  |       | (3,325,565                           | )          | (4,088,789                          | )          | (12,698,024 | ) | (12,558,977 | ) |
|                                                      |       |                                 |       |                                |       |   |   |   |   |
| **OTHER INCOME**                                          |       |                                 |       |                                |       |   |   |   |   |
| Interest income, net                                      |       | 350,573                              |       | 408,931                             |       | 1,125,291 |   | 1,502,030 |   |
| **NET LOSS**                                              |       | $                                    | (2,974,992 | )                                   | $          | (3,679,858 | ) | $ | (11,572,733 | ) | $ | (11,056,947 | ) |
| **BASIC AND DILUTED NET LOSS PER COMMON SHARE**           |       | $                                    | (0.18      | )                                   | $          | (0.26 | ) | $ | (0.72 | ) | $ | (0.79 | ) |
|                                                      |       |                                 |       |                                |       |   |   |   |   |
| **WEIGHTED AVERAGE NUMBER OF COMMON SHARES  OUTSTANDING** |       | 16,855,504                           |       | 13,954,450                          |       | 16,131,017 |   | 13,926,690 |   |

 

DUSAPharmaceuticals, Inc. is a biopharmaceutical company engaged primarily in thedevelopment of Levulan Photodynamic Therapy (PDT) and Photodetection (PD) formultiple medical indications, with its primary focus in dermatology.  PDT and PD utilize light-activated compoundssuch as Levulan to induce a therapeutic or detection effect.  The Company maintains offices in Wilmington,MA, Valhalla, NY, and Toronto, Ontario.

 

Except for historicalinformation, this news release contains certain forward-looking statements thatrepresent our current expectations and beliefs concerning future events, andinvolve certain known and unknown risk and uncertainties.  These forward-looking statements relate toDUSA’s expectations of increasing its sales force and the sales forces’ abilityto serve key markets, anticipated revenues generated by BLU-U sales,expectations with regard to the launch of clinical studies, expectations ofDUSA’s position regarding developing new indications and defending itsintellectual property, requirements for future profitability, expected levelsof legal expenses, and the timing of a decision in the Australian patentdispute.  These forward-lookingstatements are further qualified by important factors that could cause actualresults to differ materially from those in the forward-looking statements.  These factors include, without limitation,

 

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the increasing marketacceptance of our products, changing market and regulatory conditions, theimpact of competitive products and pricing, changes to DUSA’s corporatestrategy, the reliance on third-parties for the marketing, sale, production andmanufacture of our products, the maintenance of our patent portfolio, and otherrisks and uncertainties identified in DUSA’s Form 10-K for the year endedDecember 31, 2003.

 

For further informationcontact:

**D. Geoffrey Shulman, MD**,President and CEO

or **ShariLovell,**Director, Shareholder Services

Tel: 416.363.5059 Fax416.363.6602

or visitwww.dusapharma.com

 

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